Convening #4 Public Funding for Guaranteed Income Programs

 

Topic

Leveraging public funding options, including American Rescue Plan Act (ARPA) funding, to support guaranteed income programs

Objectives

As states, counties, and local governments are experiencing an influx of funding with the passage of the ARPA, the GICP wanted to prioritize a conversation on public funding for guaranteed income programs. This convening will share research and examples from across the country while acknowledging that there is much to learn about ARPA funding. In addition to the objectives below, we hope GICP members will bring their expertise on this topic to create a community of shared learning during this convening.

  1. Learn how pilots and programs across the country have obtained local, state, and federal public funding

  2. Understand the key features of the American Rescue Plan Act as it relates to direct cash disbursements and as a potential pathways to pursue funding

  3. Learn from fellow GICP community members approaches to pursue public funding and apply them to your local context

  4. Develop learning groups with others to pursue public funding, including ARPA

Preparation

In preparation for this meeting please review the following resources:

NOTES 

Panel 1: General Public Funding for Guaranteed Income

Sean Kline, Stanford Basic Income Lab

  • Temporary Assistance for Needy Families (TANF) and Department for Housing and Urban Development (HUD) are two possible sources of public funding for guaranteed income; however, both have long-standing problems.

    • TANF is flexible block grants and is the main government program associated with cash welfare. Provides cash assistance for up to 2 consecutive years and total for 5 and is designed to support families during search for work.

      • Offers some potential to fund GI pilots because states have broad discretion to determine eligibility and use of those funds. The funding goes to states and states can seek a waiver for work requirements. Non recurrent, short term benefits commonly known as “Diversion payments” are designed to help people through emergencies which could be a framing of guaranteed income. In 2019, only 23 of 100 families received TANF assistance – depends on location. States with higher African-American populations tend to have less generous and more restrictive policies and we see this across the country.

      • States must approve municipalities’ use of TANF funds. Even in states like California, where the funds are permitted to be used for a guaranteed income pilot, there is the question of whether state or local agencies, like a human services agency, are willing to release those funds for a time-bound pilot. Partly out of the concern it may undercut funding flows for families in programs that are proven, even if problematic programs. Highly contentious even at the local level among like minded agencies.

      • One example during covid was in Memphis, TN that dispersed TANF funds to families that experienced Covid related job loss.

    • HUD has four programs worth considering for guaranteed income pilots.

      • Family Self-Sufficiency Program while this program is intended to support asset building and financial capability, grants go to public housing authorities to cover staff salaries for housing voucher programs, so there is a limited scope to fund guaranteed income pilot. However, since the program supports cities to open interest bearing escrow accounts for public housing residents and deposit money into these accounts equivalent to what participants would pay in rent increases means there is an existing mechanism to structure and fund cash assistance to public housing participants.

      • Homeless Assistance Grant offers limited scope to support guaranteed income pilots. The scope is limited because not much money but may be able to help those very low income individuals at risk for homelessness.

      • Community Development Block Grants are subject to less federal oversight and used at the discretion of municipal government and subgrantees of municipal government. So there is some potential to fund guaranteed income pilots. HUD normally restricts direct services to 15% of the total block grant but CARES Act waived that 15% and also more flexibility. Similarly, HUD typically restricted payments to recipients to no more than 3 months but under CARES, this was waived.

      • Community Service Block Grant which had additional funding under the CARES Act, these are relatively flexible block grants to states that may be used for municipal guaranteed income pilots. The grants can also go to
        “Community Action Agencies” or CAAs sometimes receive additional funding for “barrier removal”  that can go to low income families as recurring transfers.

      • Examples:

        • San Antonio, TX dispersed direct cash assistance to residents on gift cards using additional CARES Act funding through HUD community development block grant combined with additional city gender funds

        • Segway, AK used CARES Act funding to establish an emergency cash assistance program

        • Holyoak, MA explored CARES act funding to provide one time $800 payments to 3,400 elementary school students but was denied approval from the state — highlighting the tension between the state and local level negotiating what is feasible under federal funding

        • Multnomah County, OR (Portland) began dispersing CARES Act funding to BIPOC led organizations who in turn began dispersing guaranteed income payments of $1000 per month to BIPOC residents. The program has stalled because of a lawsuit claiming discrimination again non-Black applicants. $50M in grants have been awarded and 8.8M is frozen by the courts.

Teri Olle, Economic Security Project

  • Governor Newsome’s $35M for Guaranteed Income Programs

    • In California, the Governor proposes a budget in Jan and the legislature evaluates for months, and then revised revenues in April, and then the governor issues May Revision based on what we think will be on the coffers. CA had a great outlook and then a blockbuster expanded revenue forecast in May. Among the additions to the budget was a second round of Golden State stimulus, expansion of MediCal and a $35M proposal to support UBI in the state.

    • Here’s  what we know:

      • $35M of general fund money over a 5 year period.

      • The programs must be city or county administered, require a local match, and target low-income Californians.

      • We know it would not create a statewide guaranteed income program but would instead support local efforts. Local governments would have to pay for it using taxpayer or philanthropic dollars.

      • The projects would have to be city or county-sponsored, meaning they have a financial stake not to support the project and are approved by local jurisdiction.

      • The Legislature has until June 15 to pass the budget. There is a high likelihood the budget will pass because there’s a high surplus, relatively not that much money, legislature is actually very supportive.

Sukhi Samra, Mayors for a Guaranteed Income

  • Overview of MGI Pilots with public funding

    • All of the MGI pilots vary in funding approaches. The ways that many fund their pilots is based on their local context.

    • There are four pilots to highlight, though many use at least some public funding:

      • St. Paul, MN – People’s Prosperity Pilot – the first mayor-led pilot to leverage public dollars including state dollars and CARES Act funding

      • Richmond, VA – Richmond Resilience Initiative – leveraged CARES Act dollars and dollars from the Office of Community Wealth Building

      • Los Angeles, CA – The Big Leap – committing $24M of city dollars

      • LA County – using ARPA funding

Larry Cohen, Point Source Youth

  • 30-40 youth receive $1,250/month for two years, this is the equivalent of the cost of shared housing, a total of $30,000 over two years.

  • The program is working to end youth homelessness. A few rationale for the program and youth experiencing homelessness specifically:

    • Youth experiencing homelessness disproportionately affects BIPOC, Black specifically, and LGBPTQ youth and transwomen of color. So by focusing on homelessness there is a focus on these populations.

    • There is a lot of funding available for this initiative because there is already so much money being spent on this population in ways that harm them. NYC spends $47k per year per shelter bed for a total of $3B. All stakeholders are dissatisfied with the shelter model. Instead of building a shelter bed, why not give youth $30K?

      • Rigorous evaluation for phase 2 and randomized controlled trial for phase 3, both with Chapin Hall. NYC is really interested in youth who are assigned to the intervention and are likely to utilize shelter therefore we can understand outcomes across housing, education, etc. between those who receive the cash and those in shelters.

  • Rationale for the pilot and expansion:

    • Ethical

    • Power in the hands of youth

    • Targeted toward communities that need it the most.

    • Cheaper than alternative program

    •  Works better than current alternatives

Panel 2: CARES and ARPA Funding for Guaranteed Income Programs

Mara Henegahn, Office of the President, Cook County, IL

  • CARES and ARPA Funding in Cook County, IL

    • Cook County used CARES dollars for a one-time cash assistance program targeted toward suburban Cook County. Chicago received its own CARES allocation. Initially Cook County allocated $2M for the resident cash assistance program and it was the first time the county government had given direct financial support to residents.

    • Design: It was a one-time $600 payment to residents of suburban Cook County who experienced Covid-related hardship. Household income had to be at or below 250% of the federal poverty line, and could not be a county employee.

    • Demand: The demand for the program was greater than what they were initially able to serve, and ended up reallocating money from other programs Cook County was not able to spend into this program into the direct cash program. Demand was high and the administrative network was relatively simple. In the end Cook County did $8.3M in cash transfers to over 13k households.

    • Recipients Profile:

      • 70% were women-led households;

      • 65% had children;

      • 80% were in communities of color; and

      • average median income was $18k/year.

    • Learnings:

      • Cash payments are not the same as guaranteed income but were a building block for where we are not here.

      • Helped to think through program considerations and parameters and how to design a program that leads toward a policy that the county or a pilot can support.

      • This program was administratively simple.

      • Made sure not to use a first come-first serve model, to level the playing field. Eventually we were able to serve every applicant.

Councilmember Johana Bencomo, Las Cruces, NM

  • CARES and ARPA Funding in Las Cruces, MN

    • CARES

      • Because of the size of Las Cruces, they did not receive CARES funding directly, CARES funding went to the state. Las Cruces has had an immovable poverty rate for the past decade.Las Cruces allocated $3M towards nonprofit partners about half of  which was used for direct cash assistance through cards.

    • ARPA

      • The CARES restrictions and limitations on providing direct cash assistance Las Cruces is partnering with three nonprofits to help with a guaranteed income pilot project using ARPA funding.

      • The City of Las Cruces has a Telshor Fund, created in 2004, wth the proceeds of the prepaid lease on the city hospital. The funds are allocated for public health purposes. Poverty is a public health issue.

      • There were few barriers. At the state level there is an anti-donation clause to prevent corruption, but it has become an overcorrection and limits the use of funds.

      • ARPA funding is coming directly to Las Cruces. The city manager has allocated $2.5M in a guaranteed income pilot project to be allocated to the three local nonprofits. The nonprofits receive funding from the Kellog foundation for administration and evaluation so that the full $2.5M can go directly to individuals.